It is supposed to. Statutory employees can report their income via W-2 and take expenses on Schedule C.
Statutory
employees are a very special designation and have their own special rules. If
you are a statutory employee, you can claim certain business-related expenses
on Schedule C instead of Schedule A. This means you get a bigger tax deduction
than traditional employees.
Statutory employees
are somewhere in between independent contractors and regular employees. Most
people are regular employees - they work for an employer and the employer says
what job will be done and how to do it.
Statutory employees
have been declared employees under federal tax laws, but are independent
contractors under common law. These workers are usually work salespeople or
have commission-based jobs.
The information from the W-2 has to link with your
Schedule C
In
TurboTax, go to Wages & Income and enter
your W-2.
Ensure that Box 13
"statutory employee" is checked.
Answer the questions on the
subsequent screens until you get to:
You should be creating 2 separate Schedule C's- One for your statutory W-2 income and the other for your 1099's per the IRS code. You will allocate your expenses between the two schedule C's. This is NOT an unusual situation. It is very common for insurance agents/ some financial advisors through certain companies. I am a CPA and the information provided in this link is not clear.
If you have this situation and are not sure what to do, I highly recommend seeking out a CPA or actual accounting professional!
TurboTax may be great for certain things like smaller returns but based on the answers to these questions.... this is out of the scope of their knowledge.